Wallace v. Blue Cross Hospital Service

APPEAL from the Circuit Court of Madison County; the Hon.
WILLIAM E. JOHNSON, Judge, presiding.

MR. JUSTICE JONES DELIVERED THE OPINION OF THE COURT:

This is an appeal in a small claims action instituted by the plaintiff-appellee against the defendant-appellant insurance company to recover hospital expenses. The trial court, sitting without a jury, entered judgment for the plaintiff-appellee. Following denial of a motion to set aside and vacate the judgment, notice of appeal to this court was filed on August 4, 1972.

Marjorie Wallace, the appellee, was employed by Venture Stores in March 1969. Her employment continued until voluntarily terminated on March 12, 1971. While an employee of Venture Stores she was provided with group hospitalization coverage, originally through Travelers Insurance Company. On November 1, 1970, this group coverage was changed to Blue Cross-Blue Shield.

The record shows that appellee knew when she voluntarily left Venture her group hospitalization coverage would end. She was told by Venture at that time that she could apply for individual or Direct Pay Membership with the appellant. She was told and understood that membership in the Direct Pay Membership plan would be for the quarter April 1, 1971, to July 1, 1971.

From May 14, 1971, to May 29, 1971, appellee was hospitalized in St. Elizabeth's Hospital in Granite City, Illinois. The admitting diagnosis for this period of hospitalization, made by Dr. W.W. Bowers, her family physician, stated:

This 44 year old female is admitted again to the hospital because of severe pain in her back with radiation into both legs, especially the right leg. The patient has had numerous previous hospitalizations with similar complaints. She was hospitalized from 9-27-70 to 10-3-70 and had intensive physiotherapy to her back with improvement. The patient had a laminectomy and removal of scar tissue, disc material on 3-29-65 and the patient had had previous admission in April 1964 at which time the herniated disc at the level of L5-S1 was removed. The past history is given."

It was for this hospitalization that the claim against the appellant was made.

Though there is some conflict in the testimony regarding the date on which the appellee remitted her premium for coverage under the Direct Pay Membership plan for the period April 1 to July 1, we think it established that this premium was remitted on June 10, 1971. This was after the period of her hospitalization and one day prior to receipt of her claim by the appellant. The late premium payment was accepted by appellant, however, and there is no question about the Direct Pay Membership plan being in effect for the appellee during this period. Again there is conflict in the testimony regarding receipt by the appellee of her Direct Pay Membership certificate. This certificate states the terms and conditions of membership. In view of conflicting answers given by the appellee; in view of the statement by the appellant that the certificate was enclosed with a copy of the bill and mailed to the appellee; and in view of the fact that a copy of the bill was returned with her payment, it is not unreasonable to assume that the appellee received a copy of the certificate.

The Direct Pay Membership certificate provides (section V.B.) that coverage does not include hospital care during the first year after the effective date of the participant's current membership for:

"1. Any illness or condition (whether or not known to the participant) which is the same as or develops from an illness, condition, or symptom existing before said effective date, or

2. Any illness or condition which is the same as or develops from an illness, condition or symptom for which the participant was under a physician's care or for which medical or surgical care was recommended before said effective date."

This section of the certificate further provides that:

"A participant, continuously enrolled, who has an aggregate of one year's membership, under this Certificate, or under a prior membership which also provided benefits for prior conditions after a waiting period, shall be deemed ...

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